Deductions You Might Not Have Thought About

CRUISE CONTROL

Think road rage is scary? Wait until you see tax-time temper tantrums in full swing.

So this week, while you struggle with income tax forms, don't forget to give yourself a break and look into the driving- related deductions you might be overlooking.

When it comes to commuting costs, you might be entitled to deduct everything from certain parking fees to depreciation on a personal car used for business travel.

Keeping good records is the key to tax-time savings, several local tax accountants agree.

Nancy W. Riella, a certified public accountant and tax preparer in Colchester, advises her clients to use a notebook or personal planner to record business-related mileage, where they went, who they saw and the purpose of the trip. It doesn't have to be elaborate, but consistent and clear.

``It's really easy to let those miles slip by unrecorded, but it makes sense to keep track,'' Riella said. ``These are little things that people forget, but it all adds up.''

Paying tolls, parking at the airport and other business-related driving costs are also deductible in certain cases.

But the expenses of commuting from home to work aren't deductible, even if the office is in a remote area with no housing or public transportation nearby.

Once you start your work day, though, the cost of commuting between one workplace and another can be deducted.

That means it's a good idea to make a business-related stop near your home, such as setting an appointment with a client or checking your company's post-office box. After that, your mileage to the office can legitimately be claimed as business-related driving.

There are also many other driving-related tax regulations, some of which can save you significant bucks. The key is to learn about those deductions and keep lots of records.

``I suspect that far more people are under- deducting than over-deducting,'' said Rob Tarlov, managing partner of Paragon Financial Group in Glastonbury. ``I find that the average person is afraid to take many of the deductions they're entitled to.''

One deduction that almost everyone can claim is a property-tax credit on state income taxes for car taxes paid to their town.

Here's how it works: If your car taxes equaled $100 or less, you get a credit for the full amount on your state income tax form. Depending on your income, you might be entitled to a credit of up to $215 (the lower your income, the higher the credit). Check the State of Connecticut tax booklets this year for instructions, formulas and restrictions.

By the way, it doesn't count if your vehicle taxes are delinquent or your car is registered out of state. You've got to pay to play.

If you're putting aside your 1040-EZ tax forms this year for the more complicated forms and deduction schedules, it would be wise to consult a tax preparer or financial adviser first.

The consultation fees might be quickly recouped with the tax savings from the deductions to which you're entitled, local accountants say. Having a tax preparer also means they would field the Internal Revenue Service's questions, if necessary, allowing you to avoid that stress.

Here are the necessary federal tax forms for driving-related deductions:

* Form 2106 or Form 2106-EZ for employees reporting business expenses.

* Form 1040 Schedule C, or Form 1040 Schedule C-EZ for self-employed people reporting business auto expenses.

* Form 4562 to report depreciation on vehicles used for self-employment.